Counselors say more students cautious about taking out college loans

Guidance counselor Megan Stenberg (left) talks with student Kara Stahl, 18, about college scholarships during their meeting Thursday at Johnsburg High School. Stahl plans to attend Augustana College next year and major in communication sciences and disorders.

JOHNSBURG – The process was really stressful, but Kara Stahl knows where she wants to go to college in the fall.

“There’s a lot of things you have to fill out, the application, the scholarships and then you have to decide if you want to play a sport, if you want to go to a big school or a smaller school,” Stahl said. “There’s a lot of decision making, I guess.”

The Johnsburg High School senior is still working out the financial aspect, but the plan is to go to Augustana College in Rock Island.

This is the time of year – after spending spring and summer of junior year visiting colleges and the fall of senior year filling out college applications – the college-bound turn their attention to figuring out how they’re going to pay to go to the school of their choice, filling out financial aid forms and applying for scholarships.

Many also will turn to student loans.

About 64 percent of college graduates in Illinois have student loan debt, according to 2012 numbers compiled by the Project on Student Debt. Nationwide, outstanding student loan debt stood at $1.027 trillion at the end of September, according to the Federal Reserve.

Stahl isn’t worried about student loans, she said. She’d have to get some no matter where she goes, and said it will be a manageable amount.

But a growing number of high school students are looking cautiously at student loans, said Megan Stenberg, a guidance counselor at Johnsburg High School.

“A lot of students now, they’re more aware of student loans, and so I think their worry is that they don’t want to take out student loans,” she said. “They’re afraid of them, and I think that’s the biggest difference. Years ago, you didn’t really think like that.”

JC Brown, a counselor at Prairie Ridge High School in Crystal Lake, agrees that the word “loan” scares students.

On the financial aid and scholarship handout Prairie Ridge’s college and career center gives students, the flip side now lays out a college loan repayment schedule, showing students what their payments would look like depending on how much they take out in loans.

“It’s gotten so expensive, and with the economy and how it’s been for the last couple of years, it’s definitely on parents’ mind and students’ minds,” Brown said. “I’ve noticed a lot more students working to help pay for college.”

Parents especially are verbalizing their concerns about the financial side more than they used too, said Shannon Landwehr, the director of Woodstock High School’s counseling office.

“I think that especially before 2008, there was a feeling that, yes, I’ll take out the loans,” she said. “It won’t be a big deal. I think students are realizing – probably because they’re hearing from their parents – the money tree is not right outside our house. It doesn’t exist.”

The switch in perspective comes as the delinquency rate for student loans surges.

The share of delinquent student loans exceeded the share of delinquent credit card balances in 2012, according to the Federal Reserve Bank of New York. The rate of loan holders that are 90 or more days delinquent was at 11.8 percent at the end of September.

The average Illinois student that attended a four-year college will leave school with about $28,000 in debt, ranking Illinois 15th in terms of student loan debt, according to the Project on Student Debt.

But none of the counselors wanted finances to limit where students look.

It’s a common misconception that private schools always cost more than public ones, Stenberg said, adding that private colleges can often offer more in terms of grants and scholarships.

High schools also are offering paths to help keep college affordable.

Brown wants Prairie Ridge students to take at least three elective courses in careers they’re thinking about pursuing, so they have a better idea of whether this is really the right path for them before they’re halfway through their freshman year of college.

Brown attended a two-year community college before transferring to Lewis University, and so he’s also in favor of attending a two-year community college as a method for keeping costs down.

That route raises some concerns for Stenberg, though, because many students struggle to make the transition from a two-year program to a four-year one. Credits failing to transfer and difficulties making social connections can derail the switch.

“Going away to college is a great experience, personally, academically and I think everyone should have the opportunity to do that,” she said. “Don’t let the financial piece scare you away from your dreams.”

The way schools look at post-secondary education is changing, Landwehr said.

“At least in our district there is a realization that you need some education and training after high school, and while you may not realize what that is as an 18-year-old in high school, we want to provide you with the opportunity to what you want after high school,” Landwehr said.

And that education may not be at a four-year college, she said, adding that technical schools, associate programs and other training are becoming more acceptable.